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US Treasury Department: Renewed allusion to stablecoin regulation



 "If Congress fails to legislate, regulators will try to use whatever means available to them," said US Treasury Department official Nellie Liang.


The US Treasury Department again made hints on December 17 in connection with new laws for stablecoins. Treasury Undersecretary for Domestic Finance, Nellie Liang, fueled further speculation about stablecoin regulation because she spoke about the "potentially great risk" for investors of using stablecoins. 


Following the November 2021 Financial Stability Board report on stablecoins, she stated, "If Congress fails to legislate, regulators will try to use whatever means available to them."


The Treasury Department has limited powers, as far-reaching stablecoin regulation is not possible without the support of a congressional agency. "You can do a little here and a little there, but if these are fundamental to crypto assets and they are not stable, it could be a huge risk," Liang said of the powers of the regulators.


Stablecoins are preferred by users with levers and so-called scalpers and offer traders assistance with entering and exiting crypto assets. Tether ( USDT ), the largest stablecoin with a market capitalization of over $ 75 billion, has been the subject of multiple investigations.


In the report of March this year, the auditing network Moore Cayman confirmed that the Stablecoin token of Tether Holdings Limited USDT completely by their reserves were covered . However, policy makers remain concerned because it is used very widely.


Regulators claim that an investor rush for stablecoins could put the market at risk. The magnitude of such a market collapse would also disrupt traditional financial markets. Hence, some prominent names like Mark Cuban believe that 2021 will be the year of stablecoin regulation .


Liang's comments suggest that Congress and the Treasury Department may disagree over regulating stablecoins. The Board of Directors for Financial Stability said in a November report that it was ready to take stablecoins action itself if Congress fails to pass laws.


The chairman of the US central bank Jerome Powell made a similar statement. At the meeting of the Federal Open Market Committee (FOMC) last Wednesday, he said: "Stablecoins can certainly be a useful, efficient and consumer-friendly part of the financial system if they are properly regulated. And at the moment they are not."


However, Congress remains divided. Senator Elizabeth Warren, on the other hand, has a clear stance : "Stablecoins pose a risk to consumers and our economy. They are used in a shady part of the crypto world, DeFi. That is where consumers are least protected from fraud. Our regulators must take serious action against it proceed before it's too late. "


In contrast , Senator Pat Toomey welcomes stablecoins as "an exciting new technology that enables faster payments, better payment system access, programmability and more".


Proponents of Bitcoin ( BTC ) and cryptocurrencies say that regulation of the stablecoin sector is too late. Dylan LeClair, a prominent Bitcoin analyst, claims that stablecoins are the "preferred security for cops". That is a good thing.



Moreover tweeted Alex Gladstein, chief strategist at the Human Rights Foundation, "Stablecoins are a bridge to a near future in which Bitcoin users their holdings can be coupled to any currency through mobile apps without authentication outside the banking system if needed. This need they don't have altcoins and can make instant, global, cheap payments. " With that in mind, stablecoins are a stepping stone to wider Bitcoin adoption.

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